Delivering Scotland's Air Departure Tax

Part C: Operational and Future Policy Considerations

Operation of Air Departure Tax

Revenue Scotland will be responsible for the collection and management of ADT. The Revenue Scotland and Tax Powers Act 2014 (RSTPA) provides the legislative framework for the collection and management of existing fully devolved taxes, including powers in relation to penalties, compliance and information gathering. ADT, as a new fully devolved tax, will be included within this legislative framework which will be modified as necessary prior to 1 April 2027.

The Air Departure Tax (Scotland) Act 2017 provides for a tax that is broadly similar to APD. A key difference is that aircraft operators undertaking regular taxable activity will make returns quarterly rather than monthly. Revenue Scotland will soon be engaging with airline operators to inform the development of their tax collection systems, processes and guidance.

Together, the Air Departure Tax (Scotland Act 2017) and the RSTPA 2014 will provide the overall legislative framework for the introduction of ADT on 1 April 2027. The Scottish Government remains open to considering the case for future changes, refinements or enhancements to ensure that the tax, and the administrative arrangements in place to collect it, provide the best possible value for money and levels of efficiency.

In support of the Scottish Framework for Tax commitment that taxes should be collected in a manner which maximises convenience for the taxpayer, the collection and management of the tax will be designed to take place online in accordance with Scottish Government’s Digital Nation Principles.

Question

C1 - Do you have any comments or suggestions regarding the legislative and operational framework currently in place for ADT? Do you foresee any potential challenges under the current framework?

Future policy considerations

The Scottish Government published the high-level principles of ADT on 25 June 2025. The high-level principles of ADT are that the tax will:

• Generate stable revenues to fund public services in Scotland;
• Protect Highlands and Islands aviation connectivity;
• Promote Scotland’s connectivity and growth objectives; and
• Support our net zero ambitions.

It will not be possible for each aspect of ADT policy to address each principle equally, and trade-offs will be required. However, the principles provide the long-term foundation for industry, passengers, businesses and the Scottish Government to work together to realise the economic and wider opportunities arising from the implementation of ADT in Scotland.

To provide certainty and stability for industry and taxpayers, the Scottish Government will match the UK Government’s APD rates and bands for the first year of ADT’s operation (2027-28). Rates and bands for 2028-29, including for the private jet supplement, will be set at the 2027-28 Scottish Budget. In doing so, the Scottish Government will consider the projected economic, environmental and social impacts of the proposed rates and bands, as required by section 17(2) of the Air Departure Tax (Scotland) Act 2017.

To support the preparation of ADT rates and bands for 2028-29 and future years, the Scottish Government welcomes views and evidence on the role of ADT to support its high-level principles and broader priorities as a Government, as set out in its 2025-26 Programme for Government.

In doing so, respondents should consider the implications that devolution of APD will have on the Scottish Budget.

The Scottish Fiscal Commission’s (SFC) latest illustrative forecast of Scotland’s share of APD revenues is £354 million in 2027-28.^[5] The SFC will include a forecast of ADT revenues as part of their main tax forecasts accompanying the 2027-28 Scottish Budget.

From 1 April 2027, a deduction will be made to Scotland’s Block Grant to reflect that the UK Government will no longer collect APD in Scotland (known as a Block Grant Adjustment, or BGA). The Scottish Government will then retain revenues from Air Departure Tax. This is in line with the Fiscal Framework Agreement between the UK and Scottish Governments, and the arrangements in place for other fully devolved taxes.^[6]

The size of the BGA will be indexed to APD revenues in the rest of the UK and will therefore be influenced by changes to APD policy and the conditions in the underlying tax base (for example, growth in passenger numbers). ADT revenues will be influenced by these same factors in a Scottish context.

All things being equal, the introduction of ADT would have a revenue-neutral effect on the Scottish Budget. However, the true impact will likely be positive or negative, depending on policy decisions taken by the UK and Scottish governments and the extent to which the performance of the underlying tax bases differs between APD and ADT.

Question

C2 - What are your views on the future role for ADT policy in Scotland and the associated economic, environmental and social impacts?